Tests of Controls with IDEA–Payment Receipts.

Use the information related to ELM's payment and discount policy (referenced earlier) to analyze the company's discount program and late payments. All dates for payments are based off the date the customer is invoiced.

Required:

a. Are there any companies that made their payments after the stated due date? How many companies, and what is the total dollar amount of the payments? (Hint: Each company has a two day grace period beyond the stated due date.)

b. Refer to ELM's discount policy. Are any companies receiving discounts when the invoice terms indicate they should never be eligible for discounts? What is the total dollar amount of the discounts taken by these companies? (Hint: This refers to the terms of the invoices, not whether these companies paid too late to receive discounts.)

c. Refer to ELM's discount policy. Are there any companies receiving discount percentages greater than the amount accounting to the policy?

d. Are any companies taking the discount even if they are not paying within the 10-day period? (Hint: Each company has a two-day grace period beyond the stated discount period.)